“It’s interesting to note that the share market started to move in the lead-up to the China PMI. It was above market expectation so we expect that to seep through to resource companies,” said Michael McCarthy, chief market strategist at CMC Markets in Sydney.

Metal prices also helped miners, with copper rising more than 2 percent on Wednesday on upbeat economic data from the United States, which boosted market sentiment.

But the optimism was soon offset by the HSBC figure, which found that China’s factory activity shrank for a third straight month in July to its lowest level in nearly a year as new orders fell. The HSBC index polls smaller privately-owned business while the official PMI measures activity in big state-owned enterprises.

Banks pulled back after their recent rally. Top lender Commonwealth Bank of Australia retreated 0.9 percent from a record high, while Westpac Banking Corp reversed earlier gains and edged 0.1 percent lower.